To frequent flyers/guests, 2013 is a bad year for hotel loyalty programs since several programs are having some major devaluation. You may have noticed that we seldom talk about how much we value miles and points since it is highly personal and subjective. However, this kind of major devaluation certainly has major negative impact on the hotel credit cards and we feel that we need to give some analysis here. We will go over the several hotel loyalty programs in this post.
Finally, let me share the new value we assign to one point in each program, and like always your value may vary:
- Starwood Preferred Guest (SPG): The reason why our Top Lister Amex SPG credit card is considered as one of the best travel credit cards for many years is because the value and flexibility of Starpoints. One Starpoint is generally considered to hold a value of 2~3 cents, no matter if you redeem for SPG hotels or transfer them into miles of 30 airline partners. While the transfer feature remains untouched, starting March 5, 2013, SPG will change one of its best redemption options - Cash & Points, representing an increase of 20-25% in cost. This makes it much less attractive to redeem Starpoints for hotels. For one thing, while SPG does have some gorgeous high-end properties, redeeming Starpoints toward its Category 6 or 7 hotels has been not that attractive to start with due to the fact that the so-call all-suite or all-villa properties charge double points or more. For instance, the St. Regis Bora Bora which is a Category 7 all-villa property has a BAR starting around $1,100 USD and an award night costs a whooping 120,000 to 140,000 points while a standard Category 7 hotel costs 30,000-35,000 points. The current Cash & Points option for Category 1~5 hotels presents great value even with restrictions (capacity control) and that is how most savvy travelers redeem Starpoints if they want to stay at SPG hotels, but this year it will change. On top of that, SPG also did the annual adjust of the hotel categories - less than 50 properties will go down while more than 200 will go up in category. Thus while you may still find some good value in redeeming points for hotels (such as low-end properties in general and some particular hotels), we suggest using Starpoints mainly for airline miles transfer which still presents huge value. For the transfer feature alone, we still regard highly of Amex SPG Card.
- Hilton HHonors: One Hilton point is generally considered less than 1 cent and we currently value one point at around 0.7 cent. Some of the most valuable properties for point redemption have been Conrad Maldives, Conrad Koh Samui, Hilton Bora Bora Nui, Hilton Seychelles Northolme, and Hilton Seychelles Labriz. However starting March 28, 2013, Hilton will have a revamped category chart, expanding from 7 categories to 10 categories. These current Category 7 hotels which cost 50,000 points per night will become Category 10 hotels which will cost 95,000 points per night (a 90% increase!). This literally trashes the value of the program. For people who want to build Hilton points toward these aspirational destinations, we used to recommend Amex Hilton/Surpass or Citi Hilton Reserve Visa for general spending since you earn 3 points per dollar spent and you also have great potential to beat our Cashback benchmark Fidelity Amex. Now we need to re-evaluate this strategy. As for signup bonus, if the Amex's offer remains the same as now - 60,000 points, it is not even going to be enough to cover one night at these properties. Ironically, Citi Hilton Reserve Visa's signup bonus, two weekend nights (Friday-Sunday), suddenly becomes very attractive by comparison.
- Marriott Rewards and Ritz-Carlton Rewards: One Marriott/Ritz-Carlton point is generally considered less than 1 cent and we currently value one point at 0.8 cent. Now Marriott has 8 categories ranging from 7,500 to 40,000 points per night, and Ritz-Carlton has 5 tiers ranging from 30,000 to 70,000 points per night. Starting May 16, 2013, Marriott will add a new Category 9 which requires 45,000 points a night and 36% of its hotels will go up in category/tier while only 1% will go down in category/tier. Even though it is not near as bad as Hilton's destructive change, it still represents major damage. Top-category Marriott hotels are not in the same league as the forward mentioned top-category Hilton properties or Park Hyatt which we will cover later, thus they were never the most valuable in Marriott Rewards. Marriott Rewards' strength lies in those valuable properties throughout all categories, but many of these will cost 5,000 points more after May 16. Top-tier Ritz-Carlton properties have already required a substantial 70,000 points and some lower-tier properties actually represent better value. However, even Marriott does not change Ritz-Carlton Rewards tier structure, 30% (23/77) of Ritz-Carlton properties will cost 10,000 points more after May 16. With this devaluation, the signup bonuses, currently 70,000 for Chase Marriott Premier Visa and 70,000 for Chase JPM Ritz-Carlton Visa ($395 annual fee not waived), will diminish in value. The other thing to note is that the Category-4 and Category-5 free night certificates provided by Marriott Visa will also depreciate since 53% (190/359) of Category-5 hotels will go up to Category 6 and 51% (370/732) of Category-4 hotels will go to Category 5.
- InterContinental Hotel Group (IHG) Priority Club: In January 2012, Priority Club did tweak its awards chart by adding new redemption levels across the board, resulting many properties going up 5,000 to 10,000 points per night, around 20~40% increase in cost. That was a major devaluation. We adjusted our value for one point from 0.6 cent to 0.5 due to that. In January 2013, Priority Club introduced a completely new awards chart, switching from brand-based to category-based. Now the new chart has 9 categories, ranging from 10,000 to 50,000 points per night. Around 1,200 properties move up in points while 1,300 properties move down, compared to last year. Australia, Paris, London, Amsterdam, New York, San Francisco, and San Diego are among the destinations that were hit hardest, while places like China, Japan, and Southeast Asia actually see a great number of properties going down in cost. The top-of-line InterContinental properties remain 50,000 points a night (they went up from 40,000 points in the 2012 devaluation). While IHG does not have as many aspirational properties as SPG, Hilton or Hyatt, they do have a few such as the fabulous all-villa Bora Bora Resort and Thalasso Spa whose BAR stars around $970 USD. So generally we will say the value of points does not change much from last year. The biggest reason we recommend keeping Chase Priority Club Visa is the annual free night at any non-all-inclusive IHG hotels (with capacity control though), which is not affected by the hotel category changes.
- Hyatt Gold Passport: Compared to other major hotel loyalty programs, Hyatt Gold Passport seems the most generous in terms of change for this year. Hyatt did not change its category structure and only 7 properties move up in cost while 10 move down. Category 6 Hyatt properties including several amazing Park Hyatt such as Park Hyatt Maldives, Park Hyatt Milano, Park Hyatt Paris Vendome, Park Hyatt Zurich, Park Hyatt Sydney, Park Hyatt Seoul, and Park Hyatt Tokyo, remain 22,000 points per night, which represents huge value. We continue to conservatively value a Hyatt point at 1.5 cents. With Hilton's destructive devaluation, Hyatt almost becomes the only program that allows you to redeem points cheaply for aspirational properties. Based on what we have seen so far in points devaluation in the hotel industry, we are nearly certain that in a year Hyatt will introduce a new category costing around 30,000 points per night. For now, Chase Hyatt Visa which offers two free nights at any Hyatt as signup bonus and one free night at Category 1-4 hotels upon each anniversary remains great value. Chase Sapphire Preferred and Ink Bold/Plus Business whose Ultimate Rewards points can be transferred into Hyatt points, along with United, British, Korean miles, still remain among the best travel credit cards.
Finally, let me share the new value we assign to one point in each program, and like always your value may vary:
- SPG - remains 2.25 cents due to the transfer feature
- Hilton - decreases to 0.4 cent
- Marriott - decreases to 0.7 cent
- Priority Club - remains 0.5 cent
- Hyatt - remains 1.5 cents
RSS Feed